Policies for the future of Malaysia's youth - (ISIS) Malaysia
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Institute of Strategic & International Merdeka Centre Webinar Series
Studies (ISIS) Malaysia June 2021
Economics, Trade and Regional Integration (ETRI)
Policies for the future of
Malaysia’s youth
Calvin Cheng
calvin.ckw@isis.org.my
Calvin Cheng
Twitter:
@calvinchengkw
Email: calvin.ckw@isis.org.my
Twitter: @calvinchengkwCOVID-19’s unequal impacts: youth in peril Calvin Cheng, June 2021, “Policies for the future of Malaysia’s youth” 1
Young workers, and younger women specifically, have ...and younger workers who kept their jobs face far
faced large employment losses… higher rates of underemployment
Change in employment by age and gender (% change from 4Q2019) Time-related underemployment, by age (% of employed cohort)
COVID-19 COVID-19
+6.0% Female (35+) 4.0%
+5.3%
+4.7% 3.5%
+4.0% Male (35+) 15-34 years old
+2.0% 3.0%
2.8%
0.0% 0 = pre-crisis level 2.5%
-2.0% 2.0%
Male (under 34)
35+ years old
-4.0% 1.5%
-4.3%
1.3%
-6.0% Female (under 34) -6.0% 1.0%
-8.0% 0.5%
-10.0% 0.0%
4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021
Source: DOSM LFS, Author’s estimates Source: DOSM LFS, Author’s estimates
Note: Change in employment is calculated as the percentage change between each Note: time-related underemployment is defined as those who workedCOVID-19’s unequal impacts: youth in peril Calvin Cheng, June 2021, “Policies for the future of Malaysia’s youth” 2
Younger workers are dropping out of the labour force …as they become discouraged or drop out to take on
entirely… housework/family care work
Change in LFPR by age and gender (pp change from 4Q2019) Reasons for not seeking work change from 1Q2021 vs 2019 average)
-200K -100K 0K 100K 200K 300K
COVID-19
Not interested/just finished
3.0pp +214K
Female (35+) study
+2.2pp
Male (35+)
+1.3pp
Schooling/training program +111K
0.0pp 0 = pre-crisis level
Housework/family +59K
-3.0pp Male (under 34)
Going for further studies +34K
-5.2pp
Female (under 34)
-6.0pp -5.5pp
Retired/Old age -48K
Disabled -119K
-9.0pp
4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 1Q2021
Source: DOSM LFS, Author’s estimates Source: DOSM LFS, Author’s estimates
Note: LFPR = labour force participation rate; change in LFPR is calculated as the
percentage point difference between each corresponding quarter versus 4Q2019COVID-19’s unequal impacts: youth in peril Calvin Cheng, June 2021, “Policies for the future of Malaysia’s youth” 3
Employment losses are concentrated amongst lesser- ...corresponding to large declines in elementary
educated workers... occupations vs. gains in “higher-skilled” ones
Employed persons, by education (% change 1Q2021/4Q2020) Employed persons, by occupation (% change 1Q2021/4Q2020)
-0.3 -0.2 -0.1 0 0.1 0.2 0.3
Machine operators -7.3%
Elementary occupations -6.3%
No formal education -7.9%
Craft and trade workers -5.3% Lost jobs
Services workers -0.3%
Primary -23.1%
Clerical support workers -0.1%
Skilled agricultural workers +0.01%
Secondary -8.1%
Professionals +2.4%
Gained jobs
Technicians +6.6%
Tertiary +25.8%
Managers +11.1%
Source: DOSM LFS, Author’s estimates Source: DOSM LFS, Author’s estimates
Note: LFPR = labour force participation rate; change in LFPR is calculated as the Note: time-related underemployment is defined as those who workedPolicies for the future of Malaysia’s youth Calvin Cheng, June 2021, “Policies for the future of Malaysia’s youth” 4
1 Investing in expanding existing social safety net 2 Expanding government spending on infrastructure
programs
● Increasing and extending amount and duration of the EIS’ ● Increasing infrastructure spending will raise long-term
productivity and economic growth, especially if financed by
Job Search Allowance (JSA) benefits will benefit hundreds of higher government deficits and focused on lesser-developed
thousands of jobseekers1 regions1
● Expanding full coverage of EIS benefits to more workers ● Expanding government spending to boost growth can benefit
and extend partial JSA benefits to workers who do not meet young and female workers whose employment is more
cyclically-sensitive2
qualifying criteria (incl. first-time jobseekers)
● Cover both digital and logistics infrastructure and focus on
● Expanding active labour market components of EIS improving quality as well as quantity 1 Bivens, 2014; Stupak, 2018;
1Cheng, 2020 2Gould & Kassa, 2020; Aaronson et al. 2019
More Malaysians are now out of work for longer Fiscal measures only make up a small portion of the stimulus
Unemployed by duration, 1Q2021/4Q2019 packages over the past year
Stimulus packages since 2020, by component
+250K
Fiscal measures
(excl.
infrastructure)
Duration of unemployment RM69 billion
Non-fiscal*
RM272 billion Of which
+77K Infrastructure
+42K spending
RM4 billionPolicies for the future of Malaysia’s youth Calvin Cheng, June 2021, “Policies for the future of Malaysia’s youth” 5
3 Gender-sensitive fiscal policy 4 Strengthening the bargaining power of young workers
● Distributing the burden of care work more equitably by
subsiding childcare and expanding public investment in ● Strengthening and enforcing labour standards would have
accessible state-funded childcare1 large benefits for marginalised workers (younger, female) in
particular, since they often severely lack bargaining power
● Investing in publicly-funded universal paid family leave relative to their employers and face systemic barriers1
policies that encourage equitable sharing of parental
responsibilities ● Improving minimum wages improving enforcement of
minimum wages (and selectively raising it in high-cost
● Granting legal protection to women against systemic labour regions) would be particularly helpful for young workers, who
market discrimination2 are the most likely to be earning low wages and would see
1 2 Cheng, 2020; World Bank, 2019
meaningful wage growth2
M’sia has amongst the least generous leave policies in ASEAN
Mandated paid leave, by gender ● Strengthening collective bargaining mechanisms and union
coverage for younger workers, by making it easier for young
150** workers to organise and make it harder for employers to
Maternity Paternity
penalise union activity. Expanding collective bargaining rights
112 benefits workers and helps improve labour standards3
105
98
90 90
60
44*
14 10
0 0 2 0
1 Gould
& Kassa, 2020
2 Zipperer
& Schmitt, 2020
3 Shierholz, 2019; Kochan, 2015; Lambert, 2014
Singapore Vietnam Philippines Cambodia Thailand Indonesia Malaysia
Source: ILO, Wikipedia, Author’s estimates; *Including 4 weeks shared with the
mother; **MedianPolicies for the future of Malaysia’s youth Calvin Cheng, June 2021, “Policies for the future of Malaysia’s youth” 6
5 Creating more and better jobs 6 Upgrading human capital and workforce skills
● Expanding government spending and stimulating economic ● Improve accessibility of re-skilling and lifelong learning
activity to create jobs (see Policy 2) initiatives so every Malaysian worker at any stage of their
career has access to quality education and training
● Focus on enabling infrastructure and stimulating foreign
and domestic investment (Policy 2) through investment ● Improve non-degree pathways to decent work, including
promotion abroad, focusing on policy certainty, improving improving TVET quality and enrolment for youths. Increasing
workforce skills (Policy 6) the quality and access to vocational training is linked to lower
rates of youth unemployment1
● Stimulating entrepreneurship and business formation via
stronger safety nets to encourage risk-taking (Policy 1) and ● Encouraging “high-road” employment models via tax
encouraging small business innovation credits/grants, sectoral partnerships, better labour standards
(Policy 4)2
1Biavaschi et al, 2012; Abdul-Aziz et al, 2020. 2Holzer, 2015
Business formation in Malaysia lags higher-income countries Malaysia’s TVET enrolment is low compared to its regional peers
New businesses registered per 1000 people, 2018 TVET enrolment rates, by country
12
10.0 20
17%
10 16%
16
8 12%
12
6 8%
4.7 8 6%
4
2.4 4 2%
2
0
0 Indonesia Thailand Singapore Brunei Malaysia Cambodia
Malaysia High-income average Singapore Source: ILO, UNCESCO Institute for Statistics,
Source: World Bank Cheng and Mohamad, 2020Institute of Strategic & International
Studies (ISIS) Malaysia Read my past work on this topic
Economics, Trade and Regional Integration (ETRI) This presentation is based on the following:
Policy Brief, November 2020 Read here
Presentation slides, April 2021 Read here
Calvin Cheng
Analyst - Economics, Trade and Regional Integration
Email: calvin.ckw@isis.org.my /
calvinchengkw@hotmail.com Article, May 2021 Read here
Twitter: @calvinchengkw Presentation slides, June 2021 Read here
Author page: www.isis.org/author/calvinYou can also read
